Auckland Manufacturing Industry - Major World Player in the Global Manufacturing Industry Statistics - Example

The Manufacturing Industry in Auckland Name: Course: Tutor: Institution: Date Executive Summary This report offers a review of the global context of management. The report seeks to evaluate how the environmental factors influence an organisational and industry performance, as well as how industry operations influence an overall environmental performance. In this case, the report reviews the manufacturing industry in Auckland City in New Zealand. In its analysis, the report evaluates the PESTEL analysis as well as the competitive advantage review. In summary, the report establishes that the industry is highly competitive and had an increased market potential for improvements. Moreover, it concludes that the influence between industry activities and environmental factors influence is mutual. Table of Contents Executive Summary 2 Table of Contents 3 1.0 Introduction 4 2.0 Industry Analysis 4 2.1 Industry Overview and Major Trends 4 2.2 Auckland City Analysis 5 2.3 PESTEL Analysis 6 2.3.1 Political Analysis 6 2.3.2 Economic Analysis 7 2.3.3 Social Cultural Analysis 8 2.3.4 Technological Analysis 9 2.3.5 Environmental Analysis 10 2.4 Competitive Environment 11 2.5 Ethical Dimensions 11 3.0 Key Findings and Conclusion 12 References 14 Appendices 16 Appendix 1: New Zealand Manufacturing Industry Statistics 16 Appendix 2: New Zealand Manufacturing Industry Statistics 17 Appendix 3: Auckland Manufacturing Industry Representation 18 1.0 Introduction Globalization has increased industrial and market competition, which has enhanced increased global competition as well as local development. Despite the global influencing factors, industrial development experiences local influence that either propagates or derails the industrialization and development process. In this case, the local factors include business environment and cultural factors (Shih-Chia, Ru-Jen, Jung-Hui and Li-Hua, 2005, p.1117). This report seeks to evaluate the implications of business context to the expansion, development, and growth of the business ventures. Thus, the report seeks to establish how the global and localized business contexts impact and influence industrial growth. In particular, the report evaluates the manufacturing industry, one among the industries fast growing in the economy. In order to present a specific approach on how local contexts influence industrial development and expansion, the report evaluates the industry in the Auckland City context. The report is structures to present the industry analysis, highlighting its major trends in the market. Moreover, the report offers an environmental analysis using the PESTEL analysis. In addition, the report reviews the ethical dimensions in the market. Finally, the study lists out the key findings and offers a summative conclusion. 2.0 Industry Analysis 2.1 Industry Overview and Major Trends The manufacturing industry is one among the most developing industries in the global market and economy platform. In this case, the manufacturing industry has been on the rise due to the establishment of new production methods and processes because of technology changes. In par5ticular, the emerging markets have been at the forefront in raising and enhancing increased manufacturing activities growth. Corporations in such markets continue to expand their production services. For instance, the emergence of increased manufacturing services in the region has expanded increased international markets expansion and increased exportation services. In this case, a number of multinational corporations have increased their presence in such areas. This is evidenced by the New Zealand manufacturing industry analysis as demonstrated under appendix 1 (Wilson, 2013, p.10). Zheng, Soosay and Hyland (2008, p.53) conducted a study to evaluate the emerging trends in the manufacturing industry in the Asian market. In the analysis, the study established that the industry has experienced increased emerging trends in its operations. As such, the study revealed that the industry is receiving increased off shoring services. This is because of variances in increased costs of production changes in the industry. Multinational organizations have resulted to increase off shoring services, especially in the Asian market to allow for reduced costs of production. The multinational organizations resulted to this action to take advantage of the reduced raw materials acquisition costs as well as reduced labour costs in the economy. This as evidenced under appendix 2 has resulted to increased industry productivity. Moreover, the manufacturing industry has resulted to the adoption of modern technology and production techniques in the industry. This has resulted into increased production and costs efficiency. 2.2 Auckland City Analysis The Auckland City is one of the busiest cities in New Zealand. The City has an increased number of manufacturing firms. In New Zealand, the City contributes to the overall GDP in the market. The city form a critical part in the industry overall performance. In particular, a 2009 analysis revealed that the City manufacturing industry had created 353,000 jobs in the market. This represented a 26.3% employment population in the overall employment opportunities in the New Zealand economy. This is illustrated under appendix 3. The economy is based on the present manufacturing industry in the city. As such, the City’s influence in the market has established and enhances its position as a national manufacturing hub in New Zealand. This can be evidenced by an analysis in 2003, on the overall manufacturing industries in New Zealand (Wilson, 2013, p.15). In this case, it was established that three of the ten largest companies in New Zealand, including the Air New Zealand, Foodstuffs, and Fletcher building Companies are headquartered at Auckland City. This demonstrates that the business environmental factors in the city influences greatly not only on the local industries performance, but also on the overall New Zealand context manufacturing industry. As a result, due to their exportation aspects in the industry, the city represents a critical part in the overall global manufacturing industries expansion (Lewis and Stillman, 2007, p.46). 2.3 PESTEL Analysis In order to establish the nature and extent to which the organizational environment in the global context and business organizations have increased, this report adopts the political, economic, social, technological, environmental and Legal (PESTEL) analysis. This tool, as Yüksel (2012, p.53) argued, enhanced the development of a balanced approach on the relationship and interrelationships between business enterprises and operating environments. 2.3.1 Political Analysis The global political environment has direct implications on the manufacturing industry development and expansion. As such, the political goodwill and stability in the economy influences the extent of development in the industry. In this case, the political aspects of stability and transparency increased manufacturing industry growth. The transparency and reduced corruption cases in the market has increased and perpetuated instances and cases of increased raw materials acquisition as well as reduced production costs (Gregory, 1999, p.65). In this case, Auckland city has a stable political system. Besides the New Zealand political system, the Auckland Council governs the city. The Council has over the years register increases and sustained credibility and transparency levels in it operations. Consequently, this has provided a suitable environment for the functioning and operationalisation of the process. This has eased the process of doing business in the area. However, the existing political goodwill is at risk of change in the future. Competition for the available resources in the market, such as the raw materials as well as other resources leads to increased political tensions. This is because of increased multinational organizations off shoring their operations into the region. Consequently, in a bid to attain favourable treatment form the existing authorities, multinational organizations engage in unethical business practices such as corruption. Corruption forms a major risk for the Auckland existing conducive political environment. Such a development would derail the industry’s development in the region. 2.3.2 Economic Analysis A business environment economic analysis, enumerates the level of earnings, the structures, spending levels as well as the forecasted changes on the same. Thus, the analysis evaluates existing and forecasted growth potential in the global economy. In this regard, an economic environment analysis on the global market seeks to evaluate the earning levels that support the manufacturing industry. NewsRX (2008, p.85) conducted a study to evaluate and establish the economic environment on the manufacturing industry. The study revealed that the economy faces increased earnings growth that enhances the industry development. On the global platform the continued rise and adoption of supply chain management approaches, increases the market ability to expand. However, increased inflation rates are a major threat. Economically Auckland presents a viable manufacturing industry expansion. The economy has sufficient resources that allows for the availability of inputs and production agents. Nevertheless, the region experiences increased wage reductions due to increased use of unskilled labour in the manufacturing organizations as well as increasing unemployment levels because of increased technology use that allows for the use of machines over labour costs. Therefore, the increased unemployment rates increases the risks for derailed industry growth because of reduce economy earnings, reducing the overall spending rates in the market. 2.3.3 Social Cultural Analysis Social cultural analysis incorporates the social aspects in the society such as lifestyle and the cultures such as beliefs that influence the society and economy perception ad participation in economic activities. The global market social and cultural structures have changed overtime. Through globalization, cultural integration has been on the rise. As a result, societies have changed beliefs and lifestyles to adopt the global culture approach (Maré, Pinkerton, Poot and Coleman, 2012, p.24). With respect to Auckland, increased off shoring services and establishment of multinational organizations headquarters such as New Zealand airways offices in the area, increased the use of expatriates a major source of human resource in such organizations. To this effect, the changes influenced the general overall industrial performance. Traditionally, the Auckland society was base on a reserved culture that was hedged on men as the providers for their households. However, cultural integration reverted this cultural orientation allowing for cross gender workforce availability for the organizations. Consequently, this has facilitated increased growth in the manufacturing industry through sufficient labour force provision. A forecast, reveals that the market posses great human resource potential for the skilled, semi-skilled and even the unskilled jobs. Therefore, the manufacturing industry is bound to increase and expand in the near future (Maré, Pinkerton, Poot and Coleman, 2012, p.25). 2.3.4 Technological Analysis The manufacturing industry is directly impacted on by the global technological changes. Technology changes influence the manufacturing supply chain management structures. The chain runs from the suppliers of raw materials, through the organizational production process, to the distribution chain. Therefore, technology changes in production of distribution channels directly influence the manufacturing industry. On one hand, the industry faces increased advantages with the development of modern technology production process. The changes incorporate increased process efficiency as well as increased cost efficiency. As a result, modern technology developments have increased the organizational overall performance. This has resulted to the increased manufacturing industry performance. Gerke and Benson-Rea (2012, p.158) conducted a study to evaluate the role of technology change in the expansion and development of the manufacturing industry. The study revealed that technology enhance efficiency in the manufacturing industry due to the enhancement of processes such as total quality management, stockless manufacturing as well as the just in time production techniques. As such, the study pointed out those increased technological developments will continuously increase the overall industry performance in the future. 2.3.5 Environmental Analysis The manufacturing industry is reliant on adequate supply of raw materials as the process inputs. It is these inputs that are processed into the final and by products items availed into the market. It is apparent that the industry causes environmental concerns. This can be evidenced through a study conducted by Corbett and Cutler (2000, p.207). In the study, the authors sought to establish the nature and extent to which manufacturing industry was an environmental concern. In this case, the study sought to evaluate and establish if increased manufacturing process and raw materials acquisition had any negative implications on the societal environments. In this case, the study established that increased manufacturing activities risked environmental and natural resources exploitation and extinction. In this regard, it established that through unethical business practices adopted by a majority of the multinational corporations, the organizations face environmental pollution risks. This trend has persisted in the long run and is forecasted to continue in the future, unless stringent measures regulating this impact are established. Auckland City is faced with an eminent environmental pollution challenge due to the increased numbers and rats of manufacturing industry development in the economy. It is imperative for the council and other relevant authorities to enforce regulations governing and propelling business enterprises to adopt environmental sustainability approaches in manufacturing. 2.4 Competitive Environment An analysis of the manufacturing industry at Auckland reveals that there is a high level of competition in the global manufacturing industry platform. The Auckland manufacturing industry has increased singly received increased stakeholders. For instance, among the common and large market players in the region include the Fletcher Building Limited, Traffic design group, and the Skellerup Holdings Limited (“EIU”, 2013). These industries represent a few of the major players in the economy. The organizations have both regional and global presence. As such, the corporations create a global manufacturing industry competition level in Auckland. Market competitiveness in the industry is hedged on production and process efficiencies that allow for reduced production costs and increased revenues and profit margins. The organizations have increasingly invested in technology and modern production techniques to allow for increased production process e efficiency. In retaining market competitiveness and the establishment of unique selling points, the industry players have adopted diverse competitive edges. For example, The Traffic design group hedges its competitiveness on creativity and innovation, while the Fletcher Building Limited basis its competitiveness on developed infrastructure that allows for increased production efficiency. The Auckland manufacturing industry competitive edges are bound to persist in the future, as they are all sustainable and hard for competitors to imitate. 2.5 Ethical Dimensions In the management and functioning of the manufacturing industry in Auckland, a number of ethical issues arise. Such issues include environmental population, as well as unfair competition. Such issues need be resolved in order to enhance fairness and increased industry success sustainability. In addressing the issues, the Auckland Council has instituted environmental management policies and regulations such as the New Zealand environmental management systems (Corbett and Cutler, 2000, p.208). The regulations seek to establish remedies for the increased negative implications of the established ethical issues. However, in order to ensure increased restraints from such practices, it is imperative for the global manufacturing industry market to develop and execute regulations restricting against such organizational involvements. 3.0 Key Findings and Conclusion In summary, this report establishes that the Auckland manufacturing industry is a major world player in the global manufacturing industry statistics. In this case, it reveals that the industry contributes large percentage of employment opportunities in the New Zealand economy. The report establishes that due o its proximity to resources, a majority of the organizations position themselves in market. On one hand, a political analysis reveals that the industry faces a conducive local political environment. However, an economic analysis reveals that the industry faces increased future challenges due to the economy-increased inflation resulting to reduced earnings levels. In addition, the report, through a review of the social and cultural structures in the Auckland society establishes that the social integration systems facilitate increased support for the manufacturing organizations through increased labour supply. An analysis of the technological contribution into the manufacturing industry, establishes that it forms a major success factor that enhances market competitiveness. As such, the report establishes that systems such as reduced wastages and increased efficiency through modern technology development led to increased profit margins in the industry an aspect expected to project into the future. In this regard, a review of the Auckland manufacturing industry reveals that it is an imperative industry in the overall functioning of the New Zealand economy as well as the global market at large. Therefore, it is evident that the Auckland manufacturing industry has the potential and ability to expand in the future to allow for increase economic performance in New Zealand. References Australian Bureau of Statistics, 2014, Manufacturing Industry [Online] Available at http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8221.3.55.001Explanatory%20Notes12001-02?OpenDocument [Accessed April 4 2014]. Corbett, L.M. & Cutler, D.J. 2000, "Environmental management systems in the New Zealand plastics industry", International Journal of Operations & Production Management, vol. 20, no. 2, pp. 204-224. EIU, 2013, New Zealand: Manufacturing2003, , The Economist Intelligence Unit, New York. Gerke, A. & Benson-Rea, M. 2012, "Growing new MNEs in New Zealand: the FSA/CSA framework revisited", Multinational Business Review, vol. 20, no. 2, pp. 153-177. Gregory, R.J. 1999, "Social capital theory and administrative reform: Maintaining ethical probity in public service", Public administration review, vol. 59, no. 1, pp. 63-75. Lewis, G. & Stillman, S. 2007, "Regional Economic Performance in New Zealand: How Does Auckland Compare?", New Zealand Economic Papers, vol. 41, no. 1, pp. 29-37,40,43,46-48,51-52,55,57-58,60-68. Maré, D.,C., Pinkerton, R.M., Poot, J. & Coleman, A. 2012, "Residential Sorting Across Auckland Neighbourhoods", New Zealand Population Review, vol. 38, pp. 23-54. NewsRX, 2008, "Life Sciences; Reports summarize life sciences research from University of Auckland", Politics & Government Week, , pp. 85. Shih-Chia, C., Ru-Jen Lin, Jung-Hui, C. & Li-Hua, H. 2005, "Manufacturing flexibility and manufacturing proactiveness: Empirical evidence from the motherboard industry", Industrial Management + Data Systems, vol. 105, no. 8, pp. 1115-1132. Wilson, R 2013, “Industry snapshot for Auckland: niche manufacturing. Auckland Council technical report”, TR2013/016 Yüksel, I. 2012, "Developing a Multi-Criteria Decision Making Model for PESTEL Analysis", International Journal of Business and Management, vol. 7, no. 24, pp. 52-66. Zheng, C., Soosay, C. & Hyland, P. 2008, "Manufacturing to Asia: who will win the emerging battle for talent between Dragons and Tigers?", Journal of Manufacturing Technology Management, vol. 19, no. 1, pp. 52-72. Appendices Appendix 1: New Zealand Manufacturing Industry Statistics Table 1(a): Statistics New Zealand definition of niche manufacturing (ANZSIC 2006) ANZSIC 2006 Subdivision Name ANZSIC 2006 Code (2-digit) Textile, leather, clothing, and footwear manufacturing 13 Wood product manufacturing 14 Polymer product and rubber product manufacturing 19 Non-metallic mineral product manufacturing 20 Primary metal and metal product manufacturing 21 Fabricated metal product manufacturing 22 Transport equipment manufacturing 23 Machinery and equipment manufacturing 24 Construction services 32 (Wilson, 2013, p.10) Appendix 2: New Zealand Manufacturing Industry Statistics Manufacturing, 2001/02 (April to March) Real growth in GDP output (%) 1.3 Sales & other income (NZ$ bn) 64.1 Employment ('000) 288.8 Source: Statistics New Zealand, Key Statistics. (“Australian Bureau of Statistics”, 2014) Appendix 3: Auckland Manufacturing Industry Representation Total Employment in Manufacturing Industry Percentage Auckland 353,000 26.3 New Zealand Remaining regions 989, 205 73.7 (“Australian Bureau of Statistics”, 2014) Read More